Use Apple Pay Cash with a debit card to avoid a 3% credit card transaction fee

If you're sending Apple Pay Cash to a friend through iMessage, Apple gives you the option to choose from all of your Apple Pay cards as a source of funds. To avoid unnecessary fees, you'll need to make sure you have a debit card authorized to send money.

When using Apple Pay Cash, after you hit the send button in Messages, Apple gives the option to select a traditional credit card or a debit card from your Wallet. If you go with a credit card instead of debut, you'll pay an industry-standard 3 percent fee for the charge.

If you send a friend $500, that's $15 you could have otherwise saved by using a debit card. Thankfully, adding a debit card to Apple Pay and using it is easy.

Apple prompts users to add a debit card (if they haven't already) when setting up Apple Pay Cash. If you decline, you can always add one manually later on.

Open the Wallet app and press the plus button in the upper right corner to add a new card to Apple Pay.

The process for setting up a debit card in Apple Pay is identical to a credit card: You'll enter a 16-digit card number, along with a security code from the back of the card.

Now open the Messages app, choose the iMessage App Store icon to get the app drawer, and then select the Apple Pay icon. Enter the amount you want to send, hit the Pay button, and then hit the send up arrow to see the prompt to select a card.

If you have a credit card selected, Apple shows the 3 percent fee and a final cost. Just tap on the currently selected card to view the rest of your Apple Pay cards, and then choose the appropriate debit one.

From there you'll either use Touch ID, or double-press the side button and use Face ID on the iPhone X, in order to authorize and send the money to your friend.

A debit card frequently comes in the form of an ATM card issued by a bank, and is tied to a checking account, though it can come in other forms. Transactions with debit cards are generally instantaneous, unlike credit cards where processing can take a few days.

If you try to spend or transfer money with a debit card and don't have the proper funds in your account, the transaction will be declined. That's different from a credit card, where you instead wait and pay your bill monthly.

As you receive Apple Pay Cash, it's stored on a specific virtual card that acts as a debit card. You can send money from your Apple Pay Cash card without a fee, or you can spend it at the store (provided you have enough on the card to completely cover the transaction).

You can also transfer money from your Apple Pay Cash card to your bank by opening Settings, choose Apple Pay Cash, and then select Transfer to Bank.

I personally dont use debit cards. Would prefer to be able to buy an itunes card and store it for future use.

You can transfer money to your Apple Pay Cash card in Settings, which allows it to be sent without the fee. But if you only have credit cards in Apple Wallet, then you're still going to pay the 3% in the initial transfer to your own card.

In this situation, the only current workaround to avoid fees would be to have a friend with a debit card send you money, which would then be added to your Apple Pay Cash card. Then reimburse them with physical cash, or buy them a taco, I guess.

When I set up Apple Pay Cash I was not given the option to select a card of my choosing. I was more or less “guided” to select my bank debit card, which was already in my wallet along with a credit card. A a side note I found it interesting to see what my bank transaction displayed. I loaded $10 onto my Pay Cash to see if it really worked, and it did. This morning my bank shows the transaction as:

When I set up Apple Pay Cash I was not given the option to select a card of my choosing. I was more or less “guided” to select my bank debit card, which was already in my wallet along with a credit card. A a side note I found it interesting to see what my bank transaction displayed. I loaded $10 onto my Pay Cash to see if it really worked, and it did. This morning my bank shows the transaction as:

APPLE PAY CASH - ADDED CUPERTINO CA 12/04

You're given the option to select a card when you hit the send button in messages. Then the Apple Pay prompt comes up and you can manually choose a card before authorizing the transaction.

Our tests show that Discover Debit is handling the backend for the Apple Pay Cash "card" itself. Unclear if this applies to all users or if they have a few providers.

I hated it when I was told by friends that they would PayPal me the funds because I would have to pay the fee if they PayPal'ed from their credit card. At least, with Apple Pay Cash, it's the sender who pays the fees and not the recipient. This makes a lot more sense. With PayPal, "friends" would charge it on their credit cards, and I would end up paying the fee.

I hated it when I was told by friends that they would PayPal me the funds because I would have to pay the fee if they PayPal'ed from their credit card. At least, with Apple Pay Cash, it's the sender who pays the fees and not the recipient. This makes a lot more sense. With PayPal, "friends" would charge it on their credit cards, and I would end up paying the fee.

That's maybe because PayPal (aside from being used to pay vendors in lieu of a card) has been used for years to donate money to charities like churches rather than a peer to peer thing. It made sense to make the donation as simple and easy as possible. If they had nailed the donor for the fee, things would have gotten more complicated and he may have bulked at making the donation via PayPal -- and maybe even not made the donation at all.

I am more curious about how this will evolve than I am interested in using it. I suppose I am just a lonely person that hardly ever sends cash to "friends." YMMV. I expect this is way more popular with people 35 years younger than me. In fact, just last night I was sitting next to a kid yelling into his phone about how he was going to send money on facebook to his dad. "No dad, you have to set it up online. I can send it today. Why does it have to go to mom? OK. She doesn't know how to use paypal. Last time she had to go to a neighbors house and they showed her. OK, I'll send some screen shots on what buttons to push. kthxbye." I got the impression he was rolling his eyes a lot and was way more ticked about having to actually talk into his phone to communicate with his dad than he was about sending money.

All my credit cards have some sort of cash back reward. My recollection is that "cash advances" don't qualify. I'm guessing Apple Pay Cash is classified as such, so there is no option of recovering the vig from the card. I'm also wondering if Apple will offer some sort of option to issue refunds to your Apple Pay Cash wallet.

I see Apple expanding this in the future to compete with the likes of Square and PayPal. Square is pretty slick for a small business owner. There is a fee, but customers expect to be able to pay for things on their cards.

I hated it when I was told by friends that they would PayPal me the funds because I would have to pay the fee if they PayPal'ed from their credit card. At least, with Apple Pay Cash, it's the sender who pays the fees and not the recipient. This makes a lot more sense. With PayPal, "friends" would charge it on their credit cards, and I would end up paying the fee.

That's maybe because PayPal (aside from being used to pay vendors in lieu of a card) has been used for years to donate money to charities like churches rather than a peer to peer thing. It made sense to make the donation as simple and easy as possible. If they had nailed the donor for the fee, things would have gotten more complicated and he may have bulked at making the donation via PayPal -- and maybe even not made the donation at all.

They give the donor the option to increase the amount the donor pays to cover the 4% fee. Yes, thats a substantial vig, but the site actually provides services for that: it tracks donations, and allows for a year end receipt. It also collects information on charities and verifies their charitable status. You can research charities as well. Pretty cool. For some this is worth the vig.

For me, the coolest feature is the changing colors in the Pay Cash card graphic. Depending on angle of the phone when looking at it, the colors change. Kind of a simulated hologram effect, very nice! Beyond that, I really doubt I will use it much. But who knows when one of my kids will run out of cash sometime. Everything I buy is CC'd or Apple Pay'd anyway.

Now if only you could add a debit card that isn't supported by Apple Pay...
Kind of stupid that I have to add a Square Cash card to Apple Pay and add my actual debit card to that just to be able to use Apple Pay Cash...

Now if only you could add a debit card that isn't supported by Apple Pay...
Kind of stupid that I have to add a Square Cash card to Apple Pay and add my actual debit card to that just to be able to use Apple Pay Cash...

I ended up getting a debit card though CapitalOne as my local bank's debit card isn't supported (my local bank says they are working on it but who knows when it will be available), looks like there are no monthly fees with CapitalOne, which is good. I confirmed with them and Apple that the CapitalOne debit card is supported, I'm crossing my fingers that it will work when I receive it.